Gutenberg Research
  • Home
  • Models
  • Education
    • Cooperative Education Program >
      • Enroll Today >
        • Program Enrollment (Virtual)
        • Program Enrollment (Bootcamp - Boston)
        • Program Enrollment (Bootcamp - New York)
      • Training Hub (Winter'22-'23) >
        • Meetings >
          • Kick-off Call/Orientation (Winter'22-'23)
          • Meeting 1: Building the Model (Winter'22-'23)
          • Meeting 2: Entering Your Forecast Into The Model (Winter'22-'23)
          • Meeting 3: Target Valuation (Winter'22-'23)
          • Meeting 4: Live Starbucks Release (Winter'22-'23)
          • Meeting 5: Live FOMC Policy Release & ERP Update (Winter'22-'23)
        • Classes >
          • Class 1 - Introduction to Financial Modeling (Winter'22-'23)
          • Class 2 - Building the Income Statement (Winter'22-'23)
          • Class 3 - Balance Sheet and Cash Flow Modeling (Winter'22-'23)
          • Class 4 - Model Calibration & Forecasting (Winter'22-'23)
          • Class 5 - The DCF Inputs: Beta, ERP, CAPM, & WACC (Winter'22-'23)
          • Class 6 - Discounted Cash Flow Valuation (Winter'22-'23)
          • Class 7 - Market Multiple-Based Valuation (Winter'22-'23)
          • Class 8 - How to Use Your Earnings Model (Winter'22-'23)
        • Other Program Links >
          • About the Exam
          • Co-op Program Exam
          • Model Submission (Winter'22-'23)
          • Co-op Bio Form
          • Co-op Q&A (Winter'22-'23)
    • Books >
      • Procrastinator's Guide - SBUX >
        • Templates - SBUX
      • Book Registration - Third Edition >
        • Templates - Third Edition
      • Book Registration - Second Edition >
        • Templates - Second Edition
  • About
    • Contact
    • Email Distribution Sign-up
    • Terms of Use
    • Privacy Policy

Starbucks Corp (NASDAQ:SBUX) Earnings Model  

Author: Christopher Adrian, Published: October 10, 2021 8:15am Category: Earnings Preview (Prior to the F4Q2021 SBUX Results)

Q4FY2021 Earnings Preview: SBUX is scheduled to report Q4FY2021 earnings on 10/28. I do expect Q4FY2021 EPS to be $1.00 (consensus $1.01), leading to FY2021 EPS of $3.24 (consensus $3.24). Q4FY2021 revenue is expected to be $8.28bn., leading to FY2021 revenue of $29.19bn. 

Base Scenario: The main drivers of this model to forecast top-line growth are new stores added and the yoy. comp. stores sales growth rate. Bottom-line growth is also driven by the targeted operating margin (non-GAAP). According to my base scenario I do expect the yoy. comp. store sales growth rate to be 4.5% from FY2023 onwards, being in line with the targeted long term yoy. comp. store sales growth rate (4.0% to 5.0%). I do expect that this management guidance already accounts for some of the major trends in the global coffee market:
  1. yoy. growth of the global coffee market of 8.0% to 9.0% until 2024,
  2. consumer shifts to higher quality products (e.g. "premium arabica coffee") and
  3. coffee as a part of a change in consumer's lifestyle with trends to "better for You" and "cold brew" options.
​Therefore, I do not want to expand this growth rate further and like to be on the conservative side here. In 4QFY2021 and FY2022 I still see some recovery from COVID-19 thus yoy. comp. store sales growth rates are expected to be higher than the given target range. The operating margin (Non-GAAP) is expected to be at the upper bound of management's target range (18.0% - 19.0%) in 4QFY2021. However, from Q4FY2022 onwards until Q2FY2024 I do see some pressure on margins due to a) coffee and food price inflation as well as b) some upward pressure on wages.
​
The main effects are expected to take place in FY2023 due to hedging strategies conducted by management. With regard to favorable global trends and the pricing power of SBUX, I do expect that the pressure on margins will be partially offset by pricing initiatives in FY2022 and FY2023, leading to operating margins (Non-GAAP) to be at 18.5% in FY2023.


Valuation: The implied 12m target share price is derived from the equal weighted average of my DCF model (base scenario) and from 12m F P/E-multiple with 31.4x base scenario FY2022E EPS of $3.79. The 12m F P/E-multiple represents a premium to a group of comparable fast food restaurants (Median 26.2x) which I think is reasonable due to the potential of higher medium and long term revenue growth of SBUX.  More details are given in the equity research report attached.
SBUX Model (Adrian).xlsx
File Size: 509 kb
File Type: xlsx
Download File

ERP Model (Adrian).xlsx
File Size: 2362 kb
File Type: xlsx
Download File

SBUX Research (Adrian).pdf
File Size: 184 kb
File Type: pdf
Download File


​Disclosure: ​The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.
About the Model Developer
Gutenberg Research is a media and education company. The information presented on our website and within Gutenberg Research models, files, or other content does not represent investment advice. Data and information presented on this website, or on third party websites posted by us, within our models, files, and other content is for demonstration only, and is presented “as is”. Neither Gutenberg Research nor any Gutenberg Research agents or associates are liable for any errors, delays, incompleteness of data presented, or for actions taken based on reliance on any information contained on this website or within Gutenberg Research models or other content. Investors should consult a professional investment adviser prior to making investment decisions. By accessing this site and/or receiving our models or other content you are deemed to have read and agreed to our Terms of Use posted on this website. This website uses Cookies, refer to our Privacy Policy for details. The Gutenberg Research logo is among the registered and unregistered trademarks of Gutenberg Research LLC. © Gutenberg Research LLC 2023. All Rights Reserved.